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Linking firm performance with board diversity: A literature review

Author

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  • Fawz Manyaga

    (Institute of Social Sciences, Ibn HaldunUniversity, 34494, Istanbul, Turkey)

  • TahaAmmar

    (Institute of Social Sciences, Ibn HaldunUniversity, 34494, Istanbul, Turkey)

Abstract

When we hear the word diversity, usually the first word that comes to mind is difference, and diversity steams from difference, in this paper, board diversity is discussed, in addition to linking it to firm performance, diversity is important, and it’s especially important in the board room of a given firm because it allows for different perspectives and opinions which can impact the decision-making process in the firm, which ultimately can affect the performance of the firm. The purpose of this paper is to give a relational guide on how board diversity can greatly impact the achievements of a firm. This paper is a theory-based study and aims to develop a critical approach of defining board diversity and linking that to the performance of the firm. This paper is a theory-based study because it utilizes the existing literature in order to determine the impact of board diversity on firm performance. This study also uses different theories and existing literature to highlight the relevance of having a diverse board in the firm. To find the relation, various studies and existing literature were analyzed to develop a critical approach to relate board diversity to firm performance. In conclusion, this paper outlines different aspects of board diversity while providing a critical look that allows us to assess the importance of board diversity and its connection to firm performance.

Suggested Citation

  • Fawz Manyaga & TahaAmmar, 2020. "Linking firm performance with board diversity: A literature review," Bussecon Review of Finance & Banking (2687-2501), Bussecon International, vol. 2(1), pages 10-18, January.
  • Handle: RePEc:adi:bsrfbs:v:2:y:2020:i:1:p:10-18
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    References listed on IDEAS

    as
    1. Aggarwal, Raj & Jindal, Varun & Seth, Rama, 2019. "Board diversity and firm performance: The role of business group affiliation," International Business Review, Elsevier, vol. 28(6), pages 1-1.
    2. Umit Hacioglu & Gul Sevgilioglu, 2019. "The evolving role of automated systems in supply chain management and its cyber-security issue for global business operations in industry 4.0," International Journal of Business Ecosystem & Strategy (2687-2293), Bussecon International, vol. 1(1), pages 01-11, July.
    3. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
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